How to Pay Off Debt Fast in 10 Easy Ways

The below article was composed by contributor Elaine McPartland. If you are interested in writing for My Money Design, please feel free to contact me.

Debt, in general, can be extremely difficult to get a handle on. Between the misleading terms and harassing creditors, you may feel lost in a sea of uncertainty. Fortunately, there are ten easy ways for how to pay off debt fast that you can tackle and attain financial liberation once and for all.

How to Pay Off Debt Fast – 10 Easy Ways:

1. Contest Credit Card APR Increases:

If you feel at the mercy of the creditors and think you have to accept all their “conditions,” think again. Rate-jacking has become a widespread trend to which far too many people fall victim. Luckily, interest hikes can be contested if you contact the company within 60 days. The downside is you won’t be able to use the card during that period but it’ll be a good opportunity to repay what you owe at the lower rate.

2. Opt for Credit Union Loans or CDFI’s:

Credit unions are non-profit organisations that generally offer cheaper loans because they are owned and operated by their members. These loans are generally smaller in amount but they do not incur the general fees (set-up, administration, early redemption, etc.). At most, a credit union can charge 2% interest a month. This low rate makes it a much better value than any payday or doorstep loans. Other advantages include:

Avoiding the large banks

Supporting a community-based program

Convenience (there are over 450 credit unions in Britain so you’ll have no problem locating one near you)

Community development finance institutions (CDFI’s) are comparable to credit unions except they are not-for-private-profit organisations that help individuals who can’t access the mainstream financial services. Explore these options to limit your debt.

3. Stay Clear of Payday Loans:

Stay clear of payday loans at all costs. In addition to being outrageously expensive, (some APRs are over 4,000%) they make use of the continuous payment authority that is in place to make requests for payment in case a transaction hasn’t already been verified. What does this all mean? This means that you are likely to dip into the red, so only take out a payday loan as a last resort.

4. Give Your Credit Score a Boost:

One of the easiest ways to qualify for lower credit card rates is to have a good credit score. Use a service like Callcredit, Equifax, or Experian to get a detailed report of your credit score and history. Once you have a solid understanding of where you stand, you can start working to improve it. Also look out for any mistakes on your file which could have a serious impact on you score.

5. Ask for an Overdraft:

Going into unauthorized overdraft is guaranteed to be a costly mistake accompanied by all sorts of extra charges. To avoid this financial fatal error, talk to your bank about increasing your authorized overdraft. They’ll be more likely to work with you if you speak with them ahead of time rather than arguing with them after the fact.

6. Seek Debt Consolidation:

Asking for help is nothing to be embarrassed or ashamed of. Debt consolidation involves taking multiple unsecured debts and combining them into one monthly payment. This in turn reduces the number of bills you have to pay and helps you get a handle on your debt. Consolidated Credit is a professional resource which offers debt relief solutions customised to meet your financial needs.

7. Pay Off Debt First:

Before you start stashing away extra cash in your mattress be sure to pay off your existing debt. It doesn’t make sense to invest your current earnings in a savings account in you are constantly hounded by creditors for the money you owe. Right now, the best savings accounts pay around 2.3% AER. Compared to the average interest rate of 18% on a credit card, you’d be better off repaying what you owe.

8. Patience Is a Virtue:

Tackling your finances is no easy feat so just take it slowly. Don’t rush into any programs before you fully understand the terms and conditions as well as the current affair of your budget. Practice patience and take it one step at a time.

10. Start Small:

If you’re bogged down with debt and don’t know which ones to pay off first, consider making a scale of your lenders from highest interest rate to lowest. Pay off the debts with the high interest rate first. Also take into consideration the “priority” debts. These include:

Mortgage or rent arrears

Gas and electricity arrears

Council tax arrears

Getting a handle on your debt doesn’t have to be impossible. Keep these ten suggestions for how to pay off debt fast in mind and you’ll be on the right track to financial freedom.

I like your pay debt off first tip. I think too many people get carried away with stashing away money when they still have debts to pay.Glen @ Monster Piggy Bank recently posted..How to Save Money on Groceries

A good budget is definitely helpful! It can help you see where you are overspending, and then you can hopefully apply that extra money towards your debt.Michelle recently posted..July Goals and Life Update

Great tips to ponder. Definitely, stop borrowing money if we have pending loans to pay. First thing to do is to pay the previous debt. A budget plan will help us not to borrow money because we are working on certain amount of cash that we should only spend in a particular time. If our budget is not sufficient, find opportunities to earn more and will sustain your lifestyle. Always, save first!anthony a. @ financial freedom ideas recently posted..Reveal the Financial Freedom Secrets and apply it into your life! Be amaze now!

Thanks for these very useful tips. I used to have debts when I got my first job. But now that I have my own family to support, I become more responsible with my finances and with how I deal with debts.Jeremy Norton recently posted..Help with Setting up a Business

A good article; paying off debt truly requires an action plan. In addition to credit union loans, there may be the option of borrowing from a peer-to-peer lender; this type of service has become more widely available, although a reasonable credit score may still be required. Point 9. about Budget is critical, as part of dealing with the cause of the debt.

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